India’s cut, polished diamond export to dip by 22% in FY24

India is expected to see a 22% drop in its export of cut and polished diamonds to US$ 17.2 billion in the current fiscal year. This decline is attributed to reduced demand from major consumer nations, according to the rating agency ICRA.

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As per ICRA, India’s export of cut and polished diamonds will decline by 22% to US$ 17.2 billion in the current fiscal year. This decrease can be attributed to weakened demand from major consumer nations.

During the initial five months of the present fiscal year, there was a significant 31% Y-o-Y decrease in the export of cut and polished diamonds. This decline was primarily driven by reduced export quantities and elevated prices for polished diamonds, as reported. The export of cut and polished diamonds has been consistently decreasing since the first half of the 2022-23 fiscal year.

“The export contraction is primarily being driven by weak underlying demand conditions in key consuming nations like the US and Europe due to the inflationary pressures, leading to a shift in spending away from diamonds,” according to Icra’s vice president and Sector head Sakshi Suneja.

The demand from China, representing a substantial 10-15% of global demand, has not shown significant improvement so far. Additionally, the competition from lab-grown diamonds, which are priced considerably lower than natural diamonds, has further exacerbated the decline in volumes, especially for larger diamonds ranging from one to three carats. It’s noteworthy that the proportion of lab-grown diamonds within India’s total exports of cut and polished diamonds continues to grow.

The prices of rough diamonds are expected to remain high in FY2024. Currently, these prices are hovering around the median level seen over the past 15 years, even though there has been a slight decrease in recent months.